In morning trading on the stock market today, Globus Medical stock plunged 7.9%, near 52.90. On Thursday, before the medical technology firm reported earnings, Globus Medical stock briefly topped a buy point out of a consolidation at 57.65, before closing at 57.44.
During the quarter, Globus Medical earnings showed that revenue growth slowed to 11.8% in constant currency from 13.3% in the prior period, Needham analyst Mike Matson said in a report to clients. Capital sales were seasonally weak and emerging technology sales of $6.3 million lagged his view for $9 million.
Still, Matson kept this buy rating and 65 price target on Globus Medical stock.
“We believe Globus Medical’s emerging technology segment, sales force expansion, new products and conservative guidance should enable it to continue to deliver upside,” he said.
Globus Medical Earnings: Sales, Profit Beat
Globus Medical makes products that ease spinal surgeries, including a robotic system.
For the third quarter, Globus Medical earnings were an adjusted to 39 cents a share, above analyst predictions for 32 cents, Matson said. Year over year, adjusted profit grew 29.2%. Sales of $169.2 million also topped forecasts for $168 million.
Sales of spine products grew 7.4% to about $163 million, above Matson’s view for $157.8 million. That also accelerated from 4.7% growth in the prior quarter “due primarily to the sales force expansion and secondarily to robot pull-through,” he said.
Emerging Technologies Falter
But emerging technologies sales were short on seasonal weakness, Matson said. The third quarter tends to be weak with regard to capital sales. The medical technology firm says that, in general, about 30% of its capital placements occur in the fourth quarter.
“Importantly, they noted that Globus Medical sold more robots in the U.S. in October than in the entire third quarter,” he said.
The medical technology company raised its 2018 outlook. Now, the company expects to earn $1.62 per share, excluding items, on $705 million in sales. That’s up from $1.55 a share and $700 million, respectively.
Globus Medical stock is highly rated by Investor’s Business Daily standards. Globus Medical stock has a Composite Rating of 98 out of a best-possible 99, meaning it performs in the top 2% of all stocks in terms of key growth metrics.
YOU MIGHT ALSO LIKE: